British holidaymakers' appetite for package tours to more exotic destinations has given a boost to profits at Europe's biggest holiday company, TUI, owner of the Thomson holidays business.

The traditional two-week package to Benidorm has fallen out of favour in recent years and Brits are now opting for sun loungers in Tunisia and Egypt, said TUI.

Will Waggott of TUI said: "Customer numbers in the UK have been boosted by a shift to package holidays in countries like Egypt, Croatia and Tunisia where people still want the security of a package holiday."

The company reported a 10.5% increase in the number of UK customers to 2.44 million.

Despite the recent terrorist attack in Sharm el-Sheikh, Mr Waggott said the British public is still visiting Egypt. "Ever since 9/11 British holidaymakers are much more pragmatic about terrorist threats."

The company, based in Hannover, Germany, said pre-tax profits for the second quarter of the year increased by 17% to €188.7m (£100m) compared with €161.3m last year.

The British continue to holiday in Spain in large numbers but are either hiring villas or travelling to their own holiday homes. Cheap flights to Spain have grown as a result. The group has rebranded its Britannia Airways arm as Thomsonfly, which offers low-cost flights to Spain to take advantage of this trend. Thomsonfly started operations from Bournemouth and Doncaster in March and April this year.

The fastest growth in the UK came from the online business. "There has been triple-digit growth, year-on-year," said Mr Waggott. As well as package holidays, which make up 80% of its business, the website also sells separate flights and accommodation. "It's relatively new in our business for people to use the internet to book package holidays," said Mr Waggott.

Higher second-quarter profits helped narrow pre-tax losses for the first half to €46.4m, against €86.7m last year. TUI said it usually makes a loss in the first quarter but, if the growth continued, it expected pre-tax profits to be up by 10%-12% for the full year.